So they came back with a 4.25% balloon for 24 months, and converts to a fixed term for 5 years after that. I told them that would absolutely kill me. I asked them to see about working something more along the lines of a 5/10 or 5/15 balloon, but it doesn't seem likely.

So the lender came back again. We're definitely getting a good ole boy deal. Offered a 4.25% 24 month interest only, and instead of going into term they're going to re-issue the remainder for another 24 months interest only. Then they'll issue one more 12 month interest only note, which will then balloon to a 5yr term at the end of that. (Rate then TBD). The interest only will be low enough that we won't hit our monthly budget, and we'll still be able to apply several $100 towards principle for the next five years. Every little bit counts, in that aspect, and we should be able to chip away about $24,000 worth of principle over those five years.